C1Part 1Special Resolution Regime

Annotations:
Modifications etc. (not altering text)

Exercise of powers: general

I18Specific conditions: private sector purchaser and bridge bank

1

The Bank of England may exercise a stabilisation power in respect of a bank in accordance with section 11(2) or 12(2) only if satisfied that Condition A is met.

2

Condition A is that the exercise of the power is necessary, having regard to the public interest in—

a

the stability of the financial systems of the United Kingdom,

b

the maintenance of public confidence in the stability of the banking systems of the United Kingdom, or

c

the protection of depositors.

3

Before determining whether Condition A is met, and if so how to react, the Bank of England must consult—

a

the FSA, and

b

the Treasury.

4

Where the Treasury notify the Bank of England that they have provided financial assistance in respect of a bank for the purpose of resolving or reducing a serious threat to the stability of the financial systems of the United Kingdom, the Bank may exercise a stabilisation power in respect of the bank in accordance with section 11(2) or 12(2) only if satisfied that Condition B is met (instead of Condition A).

5

Condition B is that—

a

the Treasury have recommended the Bank of England to exercise the stabilisation power on the grounds that it is necessary to protect the public interest, and

b

in the Bank's opinion, exercise of the stabilisation power is an appropriate way to provide that protection.

6

The conditions in this section are in addition to the conditions in section 7.